African financial markets hold great promise but still rest on fragile foundations. National stock exchanges are sluggish, trading volumes are modest, and the investor base is narrow. Behind the rhetoric of the continent's financial emergence, the reality remains marked by limited depth, hindering the mobilization of savings and restricting the financing of the real economy.

In many countries, liquidity remains concentrated in a few sovereign bonds or a handful of large companies. Bond markets largely dominate equity markets, which are themselves often characterized by a small number of listed companies and low stock turnover. This configuration limits governments' ability to extend the maturity of their local currency debt and complicates companies' access to long-term financing. The African Development Bank points out that, excluding South Africa, most of the continent's stock markets represent a very small share of gross domestic product.

This narrowness makes markets particularly sensitive to shocks. A one-off withdrawal by institutional investors, a reallocation of international portfolios, or macroeconomic tension can sometimes be enough to trigger sharp price fluctuations. The concentration of trading exacerbates this volatility. When a small number of participants dominate transactions, adjustments become abrupt and amplified, without any real absorption mechanism. The International Monetary Fund observes that this structural fragility limits the stabilizing role that deeper financial markets can play during periods of stress.

The weakness of the investor base is another obstacle. Pension funds, insurance companies, and long-term investors remain underdeveloped in many African countries. This absence deprives markets of stable anchors and increases dependence on foreign capital, which is often more volatile. The World Bank notes that expanding local institutional savings is essential to supporting the growth of domestic markets and reducing vulnerability to international capital flows.

Beyond the figures, the issue is also institutional. The quality of legal frameworks, investor protection, the transparency of financial information, and the credibility of regulatory authorities directly influence confidence. Without clear and enforced rules, liquidity cannot be sustained. Several reforms undertaken in recent years, particularly in market governance and regional harmonization, are steps in the right direction, but their effects remain gradual.

The development of African financial markets is therefore not simply a matter of technical modernization or the introduction of new products. It relies on a patient process of building trust, broadening the investor base, and fostering macroeconomic stability. As long as these markets remain small, their capacity to finance the continent's economic transformations will remain limited. African finance is progressing, but still at a slow pace, constrained by its own size as much as by its institutional environment.